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Greenland has been getting more attention from resource companies, as global warming opens up sea lanes. (Cairn Energy)
Greenland has been getting more attention from resource companies, as global warming opens up sea lanes. (Cairn Energy)

COMMODITIES

Greenland rolls up the resource welcome mat Add to ...

The tiny population of Greenland has sent a powerful message to China and a host of global mining companies eager to tap the territory’s resources: Not so fast.

Greenland has been getting more attention from resource companies, as global warming opens up sea lanes and makes accessible its vast potential riches of iron ore, gold, uranium and oil. In recent years, the region has been visited by energy and mining companies eager to exploit these resources – including Calgary-based Husky Energy Inc., which holds exploration rights off the island’s west coast. China has taken a particular interest: One of the few mining projects under way is a $2.3-billion mine led by Britain’s London Mining PLC that would send 15 million metric tons of iron ore to China annually.

But in elections Tuesday, Greenlanders made it clear they have become wary of the foreign invasion. Voters turfed out a coalition government led by Kuupik Kleist, who had been opening the island up to offshore investment. Mr. Kleist had issued roughly 140 exploration licences and introduced legislation to make it easier for foreign workers to come to Greenland. That law was seen by many as clearing the way for up to 2,000 Chinese workers to help build the iron ore mine.

Opposition leader Aleqa Hammond, who heads social democratic party called Siumut, won 42 per cent of the vote and 14 seats in Greenland’s 31-seat parliament. Ms. Hammond is expected to form a coalition within a few days, making her the first female Prime Minister of Greenland, which has semi-autonomous status within the kingdom of Denmark.

Her party campaigned on a platform of slowing down resource development. She plans to scrap the foreign worker legislation, hold public consultations on resource development, and introduce a system of royalties on resource companies.

“We are welcoming companies and countries that are interested in investing in Greenland,” Ms. Hammond told Reuters after the election results were announced early Wednesday morning. “At the same time, we have to be aware of the consequences as a people. … Greenland should work with countries that have the same values as we have, on how human rights should be respected. We are not giving up our values for investors’ sake.”

The election results were a backlash against Mr. Kleist’s open door policy, said Marie Ackrén an associate professor of political science at the University of Greenland. “It’s a kind of protest against this current policy,” she said in an interview from Nuuk. “There is a sense that there has been a little bit fast development right now and the pace of moving into this kind of big industry has been going too far.”

Ms. Ackrén added that the change in government will have an impact on existing projects and plans by other companies. “It will be a new situation. It’s a little bit uncertain now what will happen with all of these agreements that are already in place,” she said.

Although still technically Danish territory, Greenland was given self-rule and control over its resources in 2009. The territory, which has 57,000 inhabitants, still receives about $600-million a year from Denmark, but that amount has been frozen since 2009 and is expected to decrease as Greenland develops its resources. For now, Greenland relies mainly on fishing, with halibut and shrimp the main exports.

“It is a major question for Greenland now, how to handle this increased international attention to Greenland and its resources,” said Minik Rosing, a Greenland-born geologist who is based at the University of Copenhagen and has served on several commissions in Greenland. “There has been a very intense debate on what the country’s exploitation of these resources should be. … I think there is a bit of anxiety in Greenland on how this will all end.”

Prof. Rosing said Greenlanders understand that their future depends on developing resources, but they have yet to settle on how that should be done. One major issue has been uranium. Greenland is believed to hold some of the largest uranium deposits in the world, but for years the government banned mining the mineral. Those restrictions eased somewhat in 2010 but it is not clear whether Ms. Hammond will go further and permit uranium mining.

One of the new Siumut members tried to play down concerns about whether the new government will restrict development. “We wanted to consult the public about the terms and the conditions under which the large-scale projects should be formed,” Vittus Qujaukitsoq said in an interview Wednesday. “It is just a question of focusing the conditions and terms of the working conditions.”

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